Mudajaya: ‘Irregular transactions’ refer to inaccurate billings, payment of project claims

by **Cals** Wed 25 Mar 2015, 22:51

Mudajaya: ‘Irregular transactions’ refer to inaccurate billings, payment of project claims

By Charlotte Chong / theedgemarkets.com | March 25, 2015 : 10:00 PM MYT

KUALA LUMPUR (March 25): [size=14]Mudajaya Group Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) said today that the “irregular transactions” it had uncovered in its books refer to inaccurate billings and payment of project claims by a former employee, which resulted in additional costs incurred on a specific project.

However, it told Bursa Malaysia this evening that it cannot disclose the quantum of the additional costs now, as “it may jeopardise the ongoing investigation and any legal proceedings that are being initiated”.

“We are also in the process of recoveries and expect there will be a write-back sometime in 2015, pending finalisation of the investigation,” it said.

The contractor and property player also said the overall additional costs incurred on the project are mainly due to acceleration of works and general increase in construction-related costs and costs related to variation orders to the original scope of works.

It was responding to queries from the local bourse on its announcement dated March 20, in which it had announced the discovery of the irregular transactions, following an internal review.

“Based on our internal investigation, the board had firmly emphasised that all costs relating to the particular project and thus to the financial results of the group, have been fully accounted for in the company's books.”

Hence, it said no further provisions for costs are required, beyond what was reported as at Feb 27, 2014, with regards to Mudajaya Group financial results for the year ended Dec 31, 2014.

It also stressed the issue is confined to an isolated case involving one former employee and restricted to one of its projects only.

It declined to disclose the name of the related project, citing it may jeopardise its ongoing investigation.

“In addition, we are also in the midst of finalising the overall “variation orders “claims with the clients.”

"The board has referred this matter to the relevant authorities and has obtained legal advice on our next course of action. In addition, the board has commissioned an international audit firm to assist with this matter," it added.

Shares of Mudajaya closed 2.94% or 4 sen higher at RM1.40 today, translating into a market capitalisation of RM753.76 million.
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